The hole in America’s middle

When it comes to inequality in America, reality and self-image are at war.

The self-image is that everyone in the country is part of the ‘middle class’. Attempting to disqualify someone from that ever-accommodating category is like trying to convince Dick Cheney that Saddam Hussein had no weapons of mass destruction secretly stashed in his spider hole.

Conservatives capitalized on this American class confusion during the debate this fall over taxes. When Democrats contended that tax cuts should be extended to all but the rich – roughly speaking, to everyone except those families making over $250,000 annually – the right responded that those in the quarter-million-dollars-per-year set weren’t actually wealthy.

These ‘so-called rich’, as one Fox News commentator described them, were just ordinary folks. Even though these people were statistically in the top two per cent of society, conservatives contended that they, too, were part of the middle – that their income level was within reach for the rest of us. (Spoiler alert: Obama caved.)

The idea that the US in fact holds two divergent countries has been around at least since 1962, when Michael Harrington penned his bestseller, The Other America. He argued that the US ‘contains an affluent society within its borders’, with millions who enjoyed ‘the highest standard of life the world has ever known’, and ‘at the same time, the United States contains an undeveloped nation’ of the unemployed and despondent, visible in segregated urban ghettos and rural Appalachian outposts alike.

Since then, absolute poverty has decreased – although scenes much like those described by Harrington can still be found from blighted slums in Baltimore to desperate migrant labour camps in California. The greater change is that the extremely rich have since declared virtual independence from the nation at large, shipping off to form colonies of gated grandeur.

When Democrats contended that tax cuts should be extended to all but the rich, the right responded that those in the quarter-million-dollars-per- year set weren’t actually wealthy

The Economic Policy Institute reports that the top one per cent of households in the US holds 34.3 per cent of private wealth, more than the bottom 90 per cent combined.

Recently, New York Times columnist Nicholas Kristof also turned to the rhetoric of development to describe the country’s plight, comparing the US to historically unbalanced states in Latin America. ‘In my reporting,’ he wrote, ‘I regularly travel to banana republics notorious for their inequality. In some of these plutocracies, the richest one per cent of the population gobbles up 20 per cent of the national pie. But guess what? You no longer need to travel to distant and dangerous countries to observe such rapacious inequality. We now have it right here at home.’

After a backlash from readers from the Global South, Kristof felt compelled to apologize. He conceded the comparison was unfair in a crucial respect: many Latin American countries have become more equal in the past decade, while the divide between the wealthy and everyone else in the US grows steadily more extreme.

If the sight of ‘two Americas’ is becoming increasingly prominent, we have also, in the wake of economic crisis, witnessed ‘two recoveries’. In the third quarter of 2010, while unemployment edged up to almost 10 per cent, the New York Times reported that businesses reaped the highest profits logged in over 60 years of government recordkeeping. The newspaper noted, ‘The nation’s workers may be struggling, but American companies just had their best quarter ever.’

This bears repeating: amid an epidemic of joblessness that is undermining standards of living for working Americans, corporations just had their best quarter ever.

Ending such offences, and closing the hole in America’s middle, will require challenging the perception that we’re all riding the same bus. For, in reality, the unshakable notion that everyone in the country is middle class has helped push us ever closer to a society where nobody is.

Mark Engler is a senior analyst with Foreign Policy In Focus and author of How to Rule the World: The Coming Battle Over the Global Economy (Nation Books, 2008). He can be reached via the website www.DemocracyUprising.com

And this whole sorry saga is playing itself out in the UK as well - a country previously obsessed with class but which now barely mentions it, in my experience.

I live in Oxford, an affluent city with very little unemployment. Yet the BBC recently reported that 23 per cent of all children in Oxford live in poverty - a situation that's hardly likely to improve as government spending cuts kick in.

No doubt the rich will get richer, though - witness the Â£2 million bonus one Eric Daniels (departing Lloyds Bank CEO) is going to get his hands on shortly.

What is the unemployment rate of people with college degrees vs. people with high school diplomas vs. high school drop-outs?

Even when (as it should) the top rate goes up to 39.6%, what truly matters is education. If one doesn't at least graduate from high school, one is likely destined to a less than middle class life. But hey, it's easier to blame someone else than it is to blame the people who make their own beds.

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